Years of tax cuts, falling property values and unexpected expenses have finally caught up to the City of Chiefland. “The city’s going broke,” Chiefland Police Chief Robert Douglas told commissioners and a room full of concerned citizens at the year’s first budget meeting Monday night.

“Let’s be realistic. If this continues, the state’s going to come in” and take over. Douglas, who wasn’t the only department head or voice from the audience to express concern, wasn’t exaggerating.

The state can, if it finds a municipality has been run into the ground, come in and take control, appointing its own commissioners and setting its own tax rates, among other things.

Staff at Monday’s meeting told commissioners that in order to start fixing the problem, commissioners need to seriously consider raising taxes, something that hasn’t happened in years.

Since 2008, commissioners have voted to keep the tax rate the same, at 4.75 mills. A mill represents $1 for every $1,000 of assessed property value. As property values fall, which they have for the last five years, tax revenues fall, too, unless they are raised or at least kept the same through the adoption of what’s called a roll back rate.

But commissioners, against staff recommendations, have voted against a roll back rate each year since property values started declining.

City Financial Coordinator Laurie Copeland told commissioners that since that time the city has lost $457, 296 “that it was entitled to.” About $169,000 of that money was just from last year, which actually saw two drops in property value.

If the city continues on its current path, it will have about $48,000 less than it needs to operate, she said, adding that there were unknown factors that could increase that number by even more.

A roll back rate needs to be adopted, Copeland said. “You can go middle of the road (6.2713 mills), or you can go as high as you can go (6.8984 mills). Whatever you feel comfortable with on your millage,” adding that a rate would need to be proposed by the next budget meeting in two weeks. “The higher you go, the better. We can always lower it (in later budget meetings).”

City Manager Kevin Gay said the staff recommendation, at this point, is to set the rate at 6.8984, a rate that would allow the city to collect about $222,000 above expenses for use as a cushion.

“We could put that money in the bank,” he said.

“As long as you don’t have anything that breaks …” Copeland added, explaining that money saved might be needed for the unexpected.

The city was hit with just such an expense earlier this year as it was forced to fix a costly mold problem at City Hall that wasn’t covered by the city’s insurance provider.

“As a business person in the community, I totally agree with Mr. Gay,” area business man Dr. Robert Mount said. The city provides important services, such as fire rescue and police that keep people safe, he said.

“And to get businesses to come in, you’ve got to be able to show them you can provide services.”

Mayor Teal Pomeroy said the city’s services are “top notch,” stating that the police department is better than it used to be and that the fire department is “three times better than it was in 2005.”

Mount reminded him that the city has to call the county to fill potholes in city streets.

Chiefland Fire Chief James Harris said the fire department may be better than it was, but that’s largely because of grants and because things have been reorganized.

“We’ve run out of all that,” Harris said. “I can’t think of any more ways to make it better.” And problems will get worse over the years. Calls to the department increase by about 100 a year, he said.

“We’re gonna’ have to decide if we want services or low taxes. We can’t have our cake and eat it too.” Gay said another option to bring in revenues would be to raise the base rate on water users in both residential and commercial settings, an option he said he’d bring more information on at the next meeting.

So far, proposed cuts from staff include eliminating about $4,000 a year the city contributes to the Luther Calloway Public Library — the only full-time library run by the county — for cleaning services, utilities and supplies.

And staff has also proposed closing the city dump to commercial users, saving an estimated $5,600 from the budget.

About $132,000 has already been cut from the budget, mostly through the loss of city employees or those employees’ respective departments, according to staff.

Factors that could cause the budget to increase include a state-mandated raise in contributions by the city to staff and officials for pension funds.

About $40,000, according to staff, could be tacked on to the budget, as well as an additional $21,722 for the fire department, if new firefighters are hired. Harris is requesting that three part-time firefighters be moved into full-time status to help with an increasing call load. The overall difference with the new firefighters would be an increase of about $86,000.

Dwindling funds have also caused the city to lose employees, either through leaving for other jobs that pay better or through department cuts.

This, however, has caused the city to be lumped into a smaller, more expensive health insurance plan, according to staff. The exact increase isn’t known, at this point, but staff has estimated a 12 to 18 percent increase.

Related to the loss of staff, Gay said he’d like to make sure city employees are given a raise after completing certain requirements for the positions they hold. Employees are already supposed to get a 5 percent increase after graduating from a school or earning certification, he said, but it hasn’t been honored. “It’s incentive to keep employees around,” he said.

Three of the four commissioners in attendance Monday night said they were in favor of adopting a roll back rate.

Pomeroy and Commissioner Rollin Hudson said they’d like more assurance that “projected” savings from the adoption of a roll back rate meets “actual” savings.

Vice mayor Teresa Barron was not in attendance.

The next budget meeting will take place immediately after the next regularly scheduled commission meeting, which starts at 6 p.m., Monday, July 22.